Hello, welcome and good morning to this Vestas Q2 presentation. It's the voice of Henrik Andersen, and I think that was probably the best introduction I could do. From a personal point of view, I look very much forward to connect and talking and seeing many more of you over the coming quarters and not least when we do the, particularly, roadshow as well.

I also think it's in good order here to thank my new colleagues here in Vestas for also presenting the Q2 result. As you would appreciate with a start date of 1st of August, I owe them quite a big thank you for doing what they have just done in Q2. So with that in mind, let's go into the presentation here. The usual disclaimer, I think we all know of.

And then if we come to the key highlights of Q2. Surely it's the highest-ever quarterly intake we've had, 5.7 gig in the Q2, and we'll come back more on that, but also includes the first order for our new EnVentus platform.

We had a total revenue of EUR 2.1 billion, it's slightly down compared to the Q2 of 2018. Ended with an EBIT of EUR 128 million, equaling to a margin of 6%, where we say as well it's impacted by, surely, the competitive market. We have some tariffs and then of course we are looking into a very busy second half of the year.

We had the best quarter on Service yet. Strong Service performance, we are up 15% in revenue and we had an EBIT margin of 28.4%. So a very good quarter in Service.

We also saw increasing profits from MHI Vestas Offshore and, as such, we will talk more about it. But it's all about the execution in there. So net profit of EUR 22 million and means an underlying improvement of EUR 49 million year-on-year.

In terms of our outlook. We have narrowed our guidance for 2019 in -- both in terms of revenue and EBIT, surely down to that we also see an improved visibility for the full year at this point in time.

If we -- on the second slide here. If we look at the quarterly order intake, as we'd said here 5.7 gig in Q2 2019. And that was 1.9 gig higher than it was in Q2 2018, and therefore representing almost an increase of 50% Q-on-Q. But also really nice to see that it's above the Q4 2018. Particularly here, it's U.S., Brazil, Finland that were the main contributors to the order intake in Q2. And a really, really good, strong quarter.

In terms of the ASPs in the quarter, we ended at EUR 0.75 million. And as we say here, it's stable, and it's also down to that in Q1 versus Q2 we have a slightly lower part of the EPC in Q2 versus Q1. As always, there is differences in terms of geography, the turbines and also the scope. And that's, I'm sure, we'll talk more about.

In terms of the status of the order backlog. It is now all-time high, more than EUR 31 billion in. We have a year-on-year increase of 37%. So on the turbines, we are close to EUR 16 billion. And on the Services, we are just above EUR 15.5 billion, which is very, very well supported when we look into the future of Vestas.

When we come into the regional markets, surely we start with the regional highlights from Americas. Again, a continued strong demand in the U.S. with the current PTC. We know it's a very busy '19 and '20 before the PTC goes down in '21. And at the same time, we also appreciate in the U.S. right now we both have the tariff and steel mitigation, which we are working closely with through our supply chain and also with our customers.

In Latin America. We have seen the new government in Brazil introducing the first auction and we expect more auctions to come also in the coming quarters, so really well. And we have seen Argentina announcing an auction in second half of 2019, which of course will be discussed considering Argentina's current state. And then we have seen an auction in Colombia as well being announced.

So deliveries half year '19 versus '18, up almost 60%, mainly in the U.S. And then we also see in Argentina, Canada and Mexico contributing, as you will find in the announcement, to that number.

Order intake more than doubled compared to first half 2018. Again, U.S. and Brazil are having the main contribution to that. And again U.S. continues to be at a very high level.

In terms of the midterm volume outlook. As you can see, we used the external source Wood Mackenzie. And I think it's fair saying they, of course, put in that there will be historic high installations with the PTC at 100 -- in '20 and then some sort of drop off in '21, where we also know that part of that will be mitigated, for instance, from Brazil and other parts of Americas.

If we go to Europe, Middle East and Africa. I think it's fair saying here Europe right now, positive from all both EU and the countries. We see a 2.5 gig auction being confirmed in Poland for the second half 2019. Being in Denmark, we also know we have had a new government that has introduced 70% greenhouse gas reduction by 2030, which means also -- means and targets and also tools to achieve that.

And then in Germany, it seems that we still have the undersubscription of the auction in Germany continues. But I think from a German government perspective and country, they definitely have still the commitment also to speed up the retirement of the coal-fired power plants and, therefore, also committing strongly to renewables going forward.

I will say in the rest of the region, Middle East and Africa, you have also seen us that it's probably coming down to country by country. So there are countries that announced themselves entering into the renewable arena and some picks up some of the former programs they had and we'll deal with them country by country or order by order.

In terms of deliveries. In first half of 2019, up 20%, mainly in Spain, Italy and Ukraine, where we also sort of mitigate the decline we have seen in Germany in the first half of the year. Surely in the region right now, we see that there has been a relatively low level of deliveries in the first half but, therefore, there is also an expected back-end loading of delivery for second half of the year.

In terms of order intake. Slightly lower than first half last year. Finland, France are the main contributors, offsetting some of the shorts from Italy and Sweden. And then we sort of had Poland, which -- with 2 orders where we see that, that is sort of the restart of that renewable market again.

In terms of the external midterm volume outlook for the region. We see that, that is, actually here, looking to increase both in '20 and '21, signaling that EU generally takes up a positive and that will mitigate surely some of the effect from potentially America's decline. We see Germany in this number going from somewhere around 1.5 in '19 towards 4, 4.5 in '21 which of course is very positive.

When we come to Asia Pacific, we see an increased commitment in China. We have seen the auctions and the tenders started and, of course, that's well supported by the feed-in tariffs which sort of have also a 2020 time line to it. So there is a positive market ongoing both in the short but also in the longer run.

In India, we have seen that the ambitions are still to achieve 140 gig in 2030. But I think it has, and we have all seen that, some short-term uncertainties around how that is being executed and how that is being supported by also the permissions locally.

In the broader Asia Pacific region. It's positive to see the countries generally committing more and more to the renewable energy. And here we recently -- most recently saw South Korea doing exactly that.

In terms of deliveries. We have 35% lower than first half of 2018, primarily driven by Thailand and China and India and -- as a comparison. And then we see Australia remains pretty stable in here.

Good increase in order intake, 100% (sic) [107%] up from H1 2018. And therefore, we see an increased growth from -- still a strong order intake from Australia. And we see China and India also contributing to the increase here. As I mentioned, well supported by the Chinese feed-in tariff.

From an external point of view and the midterm volume outlook. Surely, they put some reduction in China post 2020 and the current policy there. And then that will be, to some extent, sort of mitigated by some of the other areas and still within uncertainty to India as well. So overall, the region is forecasted in '21 to come somewhere around 15% lower.

If we then go to our own business, starting with the Service business first. Clearly, we have had a -- as I mentioned, a very strong quarter. You know us well, so we have 86 gigawatt under service, with some -- close to somewhere around 42,000 turbines, which gives us an enormous coverage in that.

67 countries, where we have active operations, and those still goes up depending on when and where we get the service contracts on also some of the new countries. We have an average backlog around 8 years. But as you will also appreciate and you'll have probably seen in our order intake, the Service contracts generally both as new and renewables becomes with a longer and longer [tenor] in general.

Key highlights here. We had the first EnVentus order in Finland, which is supported by a 30-year service agreement. We have had a couple of multibrand deals. We had a 300-megawatt multibrand deal in the U.S. and then we had a 14-year full-scope service contract with an extended multibrand project in Europe. And in lower right-hand corner, you can see the split where we -- Service business, which is very, very well represented in Americas and EMEA and building well in APAC as the countries come along.

If we then go to the offshore. I think the heading says very much of this. It's the operational excellence that also secures how we execute on the existing projects. And this is really where we can see -- and Marika will come back to the numbers on that one, where we can see [turnover] goes up because we start having a real execution and installation of the turbines.

We have so far 1,100 turbines installed across 30 projects, 4.6 gig. We have a pipeline which is under installation, unconditional, of 3 gigawatt. And then we have conditional orders and preferred suppliers of 2.2 gigawatts currently.

I think the key highlights here in the quarter and first half is we've had a massive improvement in the installation time for the Norther project, where we are literally cutting the installation time in half compared to where we were 3 years ago. And then we have had the inauguration of the Borkum Riffgrund 2, which is 56 turbines of V164. And actually today, that's the most powerful turbine installed in the German offshore wind market.

I think in the lower right-hand corner, you will also appreciate as we will say a lot of activities is ongoing and projects in progress from Q2 are mentioned here. And really nice to see the progress in how they execute on that pipeline.

Thank you, Henrik. Then we start with the income statement. And here you can see compared to Q2 in '18 that revenue is down 6%. And power solutions have, as we said before, a very back-end loaded activity profile. But you can also see here that Service revenue increased year-over-year, so a continued good performance and also highlighted by Henrik earlier.

As a consequence of the lower activity, gross margin is down 4.2 percentage points. And you have -- as we also said before, we have a negative impact from the orders that we took late '17, also beginning, I would say, in '18, we are starting to phase them out quite significantly. So Q2 is still impacted by those project. We also have external factors such as tariffs and raw material price increases, and that's also impacting the quarter here.

Again, EBIT margin down, as a consequence of the above, by 5.5 percentage points. And that is primarily driven by the lower gross profit and an increase in the SG&A costs.

If we have a look at the SG&A, that continues to be well under control and it's one of the controllable parts from our side. You see that we are going up to 7.2% compared to Q2 of last year. That is a reflection of the activity level that we anticipate here in the second half of the year. So I wouldn't say any surprises, it's planned for.

Depreciation and amortization increased by EUR 23 million year-over-year, and that is primarily due to the introduction of new products.

If we have a look at the Service business. We see a very strong Service performance, and here you can see that revenue is increasing quarter-over-quarter and also the EBIT or the profitability is in the quarter 28.4%. As we have said previously, you will always see some fluctuations in between the quarters. But the performance continues to be very strong in the service sector, and primarily due to really high quality but also a very fruitful cost-out program in the Service business.

MHI Vestas Offshore. You heard about the highlights in the joint venture from Henrik. And here, we're talking a little bit more about the P&L. Revenue is clearly increasing compared to Q2 of last year. We are starting to install the V164, obviously having a positive impact on the P&L. And profit, as a consequence of the installations, increasing to EUR 22 million here in Q2 of '19.

The change in net working capital is, I would say, fairly flattish. We are continuing to build the inventory. And again, that's planned for because of the high activity level we see in the second half of the year. That is offset by higher down payments and milestone payments but also an increase of payables as the activity level is very high.

Cash flow. Here you can see that cash flow from operating activities is lower compared to last year. And the positive is obviously the net working capital, also having a positive swing, compared to last year. And we are delivering free cash flow before financial items or investments of negative -- but a positive swing compared to last year. So as I said before, this is driven by the working capital primarily.

Total investments continue to be fairly flattish, I would say, compared to Q1 this year and an uptick compared to last year by EUR 54 million. Again, very much as planned for. This is to cater for both the -- all the new products or the capitalized R&D, as well as capacity and the planning for the second half and to also plan for the high order intake that we have at this time.

The warranty provision and lost production factor continues to be a high focus. So high focus on quality. You see that we continue to consume less than what we provide for. But also remember that we increased provision as we have a lot of new product introductions. But well-performing lost production factor continues below 2%. So quality, again, very high on the agenda for Vestas.

The capital structure. Net debt to EBITDA, well below our threshold. I would say fairly flattish compared to Q1 of this year. So a very good performance on the net debt-to-EBITDA. If we look at the solvency ratio, it's 22.1%., and that's clearly below the end-of-the-year target. And that is driven by the increase in total assets.

I will also talk about the outlook for 2019. And we see here, on the revenue, we have changed the guidance to -- or uplifted the lower end to EUR 11 billion and the higher end remains at EUR 12.25 billion. So again, the lower level increased.

EBIT margin, as we have more visibility of the remainder of the year and also the cost for primarily the tariffs and the transportation, we have decided to narrow the guidance to 8% to 9% compared to the previous outlook of 8% to 10%.

Total investments, also catering for the higher activity level as well as the capitalized R&D, but primarily the higher activity level as a consequence of the order intake, we are now guiding for an approximately EUR 800 million.

And the Service, not the least on the revenue side, is expected to grow to approximately 10%. And we are anticipating a minimum of 24% on the EBIT line for the Service business. So that's an uplift compared to approximately.

My first question is regarding these factors which you argued for the change in EBITDA and also EBIT margin guidance. So you mentioned tariffs, transportation and scarcity in the market. If you can just elaborate a little bit more on those. So first of all, tariffs, you've previously said that you expect tariffs to increase cost of goods sold by up to 1 percentage point. Is that still the case? And also in terms of transportation, you mentioned rerouting. Can you go a bit more in detail on what is going on here? And the scarcity in the market, you also highlight, what should we sort of think about that? Is that simply just your suppliers raising prices?

So, yes. And I understand your question, Kristian. And the -- what we said last year, we said that the tariffs that we knew at that time would have an impact of 1.5% before any mitigation. I would say that we have been good at mitigating the additional costs that we anticipated for this year. Unfortunately, there has been changes in the tariffs meanwhile, and when we say that we see an increase not only in the tariff but also the fact that the positive is that we can definitely reroute because of the tariff, because of the overall global platform that we have. The negative is obviously that this rerouting is costing us. So the more we could plan for 2019, the better. And now we have surprises, I would say, from external factors.

So there is definitely a scarcity. Also, remember that the type of products that we are shipping or -- is very bulky, so there is definitely a scarcity from that perspective. And if we have other conditions or we have to do more land transport that we plan for, that's definitely also costing more. So it's a double effect on both the new tariffs as well as rerouting that we see at this point in time.

I mean obviously we have a higher activity level, and that's the positive as we see it. And we are sort of changing or narrowing the guidance. As we see, we have a very strong order intake and as a consequence very well covered for '19. But there are surprise factors that we need to change the planning. And changing of the planning because of tariffs and rerouting is a cost factor as the prices have increased.

Okay. I understand. Then my second question is sort of on the same topic, but it's -- I mean obviously you highlighted these surprise factors. How will you mitigate and compensate for this going forward? Is it possible to raise prices?

I mean I would say that you see that in any given year, the more visibility you have over your ToR or installations that you will do in a year, you plan for it well in advance. That's the cheaper option for us. And anything that causes changes to that, and tariffs obviously being one of them, is costly. And as -- if you have a signed contract, I think you know as well as I do, that it's very hard to come back and ask for something. But obviously the price picture that we see right now is very stable. And I will say a lot of discussions, both not only with customers but also with suppliers, is ongoing at this point in time.

Also a few question from my side. The first is also about this change of EBIT margin guidance. Because one thing, is 2019. But the [results] 2020 is probably more interesting. And I know you are not guiding yet on next year. But maybe you could put some color to the headwind we should reflect in our estimates. Broadly calculated, your change of guidance is EUR 100 million more or less of profitability impacting only a few months of 2019. So if you just do the math, the impact on next year could be even more severe.

Yes. And as you say, Claus, we're obviously not guiding for next year. But if you look at the order intake that we have had and continue to have, we have a very positive view on the market. And obviously, a fairly good visibility of 2020. We're also launching a number of new products that are very positively received. So I cannot say anything but we having a positive view on the 2020. I think when you look at the numbers and all the changes that we're seeing and happening in the market, I mean we are pretty successful in mitigating those. Then of course, we cannot mitigate 100% of all the surprise factors that are out of our control at this point in time.

Okay. And then a question regarding share buyback. In the past, at least, you have announced share buyback after the Q2 results. So as far as I see, you haven't done that today. What should we think about your distribution to shareholders?

We wouldn't exclude to do that after Q3. And we've always done that in the second half of the year. But considering also the activity level in the second half of the year, Claus, we will come back to it and we think it's better timed after Q3 this year.

Fair enough. And then just on Service margin, you had a very strong first half as you also mentioned. First half EBIT margin is 27.4%, and you're now guiding for a minimum 24% for the full year. Is there anything we should be aware of in the second half when it comes to EBIT margin?

No. And as you say correctly, we see a very strong performance, and that's also why we have uplifted to a minimum rather than approximately. We don't, at this point in time, expect any negative surprises. But obviously, depending on how the contracts will be performed and if we have the opportunity of the further cost-out remains to be seen as we are delivering now at the second half. But altogether, it's a positive in the Service and we're not expecting any very negative surprises.

(technical difficulty)

We have technical issues here, guys. So it's not us trying to postpone anything. We'll get back to you as soon as possible.

Marika, you've previously announced or communicated at least that in the previous EBIT margin ranged from 8% to 10%, the 10% was sort of, say, a flawless execution for 2019. Do you now see the 9% sort of, say, as a flawless level? Or does that include some sort of disruption, you can say, in the second half? That will be the first question.

Yes. And fair question, Dan. The 8% to 9% that we are guiding for, because of the higher visibility, obviously includes the different scenarios that we had in the 8% to 10%. So it will be the same methodology, it is just that we have better visibility as we had the external factors impacting the overall cost for us executing. But it's fair to assume it's a similar methodology as we had for the 8% to 10%, definitely.

I wouldn't say it's more back-end loaded than what we anticipated, it's very much in line. But so far, we have been very good at executing. So it is an extreme year, and that's what we have said all along in terms of the back-end-loaded profile, and that is materializing clearly.

Yes. So it's primarily for most simply because of the strong order intake that we have had and continue to have. So it's -- I would say, you know our global footprint. So obviously, it's a reflection of the fact that we have a global footprint. I would say that altogether, we are fairly even in where we have the overall demand. So we are -- but don't forget that we're also investing in capacity locally and have done so. So -- but in general, it's [most] and fairly evenly spread.

I have 2 questions, please. My first question is on outlook. I mean I see you are taking down top end of the range by 100 basis points on issues that were already well known to the market and you have been flagging since start of the year. So my question is that -- I mean if we look at the first of the execution issues, particularly on installations, even you would be ramping up production of V150 and other large turbines. What sort of headroom do you have in your guidance and how realistic is this 8%? That's my question number one.

Okay. So we are guiding for 8% to 9%, as I said earlier, and that is a reflection of different scenarios as we had for the 8% to 10%. So nothing has changed from that perspective. And as I said earlier, the execution part internally is very satisfactory. So it's more external factors that we see now coming in and impacting us. And it is primarily the cost for transportation and the reorg as a consequence of the rerouting that we have had to do.

And my follow-up is for Henrik. If I look at the outlook -- industry outlook that you presented, we have declined in Americas in 2021 and same we have for Asia Pacific, while the growth in EMEA is depending on Germany where basically current auction undersubscription is not painting a bright picture for 2021 installations. So my question for you is that we have a good growth in 2020 and maybe double-digit decline in '21. So how you are going to focus on cost base? And what are your key priorities for the, let's say, next 6 months?

The next 6 months, I think, it's fair saying we continue the road we're on, because we are investing a lot in the technology but we'll also be investing in some of these things in '21. And I think we're just coming out of a quarter where we've had a record order intake. So I think there's a lot of positives in this industry that we have quite some time to address when we get into '21. And then I think we need there to see that there is a big drop forecast both from U.S. and China. And I think, let's see when we get a little further, 3, 6 months on, how that actually is coming off both from a PTC point of view and our feed-in tariff in, for instance, like a country like China, which you also know we are probably not as dependent on.

Mark Freshney, 2 questions, please. Firstly, on consolidation within the sector. I think it's fair to say that the upheavals in the industry over the last couple of years have increased your market share of Vestas and of course the ongoing internal work. How do you see consolidation and M&A playing out over the coming months?

And just secondly, trying to understand the EUR 800 million per year -- or for this year, capital investments. Should we expect that going forward? Because I mean you've lent very heavily on working capital for the last couple of years. Now you're having to invest in new facilities at the same point you've got the EnVentus products R&D coming through. So should we envisage that EUR 800 million per year, extrapolating it forward?

Okay. I'll start with the CapEx. So Mark, the EUR 800 million is really a reflection of, first, the capitalization of the EnVentus projects that we have. That will continue throughout this year. And also investments in most to -- or to cater for the high demand that we have in the market right now. Should you expect the EUR 800 million going forward? I would say you should expect anything from EUR 400 million to EUR 700 million. We are definitely at the higher level at this point, because we have the 2 factors that I mentioned. But under normal circumstances, we're talking about anything between EUR 400 million and EUR 700 million, and obviously the EUR 700 million is part of new product introductions.

Okay. Thanks, Mark. And I will just also comment on -- I should say, I won't comment on how competitors are generally doing in our industry, but it's clearly that, what you just comment on, is our investment level. If you want to have a lead in the technology and therefore also being able to mitigate some of these things, you have to keep investing. And of course that requires that you also both have the earnings and cash [on it.] How would that affect the industry structure? I think we have seen some of the effects already. As we always said, we are following the clear path of the strategy of organic growth. And then from time to time, we do value for us value-accretive acquisitions, which we will consider also going forward. So that's in reality how we see that.

Alok Katre from SocGen. Two questions that I had please. Henrik, first one to you. Now that you obviously had a bit more closer ringside view of -- for the past 3 months, where do you think there is the biggest areas of improvement? Or even areas that you would like to pull back from, if that's the case? And if you could also lay your thoughts on the resource allocation, just following up from the previous question. Also in the context of some of the speculation that we've seen in the local media here in India about your strategic involvement with one of the local OEMs over there. So that one's for Henrik.

Second, Marika, just in terms of the factors that you talked about. Is it fair to say that some of these factors are temporary in terms of the supply chain tightness? Or as we look at the next year, when you've got to deliver a lot, lot more in terms of volumes, and I guess not just in the U.S., do you think we should think about these factors as a lot more entrenched and therefore as a risk even into 2020? So that would be great. I mean if you could also shed some light on whether there's any specific geographies where you are seeing this, let's say, tightness. Those are the 2.

Okay. Alok, I think I will start. First of all, I really appreciate your direct question, especially also that I'm not normally known for having a long patience. But riding into a job in already now 3 months is probably a little bit over. Also, I started 1st of August. I came out of a pretty active other CEO job. So I have stepped out of the Board first of August, and literally since then, I used all of my wake hours to be around and seeing as much as I could. But I simply don't have the opportunity to be able to cover the world and the regions within just working day number 15.

Having said that, coming from the Board and having what we call, hopefully, a nonevent succession with Anders is that, that strategy is not changing. I've been part of the Board since 2013 and I think that one is clear. We are continuing on the same path, and that's part of also, I think, the non-eventful succession here. So I will let you know if I find something really extraordinary to pick up on. But so far, I'm just super, super keen to continue what is going to be the busiest year both for 2019 and 2020 for the history of Vestas.

In terms of local rumors on companies in the industry or whatever, as I said, we don't comment on those. And if we do have something to comment on, we will simply just send out our -- sort of under these rules and regulations, we will send out appropriate company announcements. So we don't comment on rumors in that nature.

I won't comment on speculations because now you're asking me to comment on exactly rumors of that nature. So we will always look at it and look at a number of cases from time to time. And if it comes to something, we will announce; and if it doesn't, we won't comment on it.

To comment on your question around the supply chain tightness and our view on, I think what you said is, 2020. Obviously, we are in the midst of planning. We have a very strong order backlog, continued strong order intake. So that creates visibility and a very positive one for 2020. I mean I cannot give you any concerns or any positives for -- on that note on the supply chain. This is really what we are in the midst of planning right now. So we will get back to that when we give -- provide guidance basically for next year.

Fair enough. I mean are some of those -- because I was hearing that you've had to sort of make deposits against booking trucking capacity in the U.S. even 8, 10, 12 months out just because of how tight the situation over there is on the specialized trucks that you need, for instance. So just wondered, I mean, some of those factors are -- would you say they are short-term specific linked to the fact that you have the second half loaded here at this time around? Or is it something that you need to work on a lot more from a timing perspective?

I would say -- I would put it like this, Alok, the more time we have to plan with and that's where we are right now, and the more visibility we have in terms of activity levels, obviously the better. So it's the short-term change that is difficult and costly for us. But now we're talking about 2020, obviously we are in the planning process for that.

Ji from Citi. A couple, please. First, on the U.S. market. It seems like, well, the market forecast in terms of like the expected installations for '20 and '21 have come up for North America, and this is probably in the U.S. So just wondering if you're actually seeing signs of elevated growth in the U.S. for '20 and '21 given the -- [probably] the expectations have heightened over for probably, say, 3, 4 gigawatts per annum. And then the second question is that given that we're in August, well mid-August, can we get a sense of where you stand in terms of project executions for Q3? And what kind of revenue and EBIT margin evolution we can expect for Q3 and Q4, please?

Okay. I'll take the U.S. there, Ji. And I think -- thanks for the question. And I'll just say, you can also see from the order intake in Q2, yes, it is very much focused still on the U.S. market. We're very pleased with that. It's a market we know and work very closely with also from a customer side. I think it's probably a bit premature to sort of start talking about '21. There's clearly a lot of conversations. But I think that also comes down to how 2020 sort of pans out as a year. Because if you have the consideration, I'm pretty sure you as a customer [will appreciate] to get it installed and put in place before year-end '20. But it seems like there is a positive, and that was probably why I sort of said there's still quite -- some time to start forecasting for '21 and '22. But generally, we're in a good position and we have a competitive product portfolio for also addressing '21 and time beyond.

And to your question regarding our forecast of Q3, I mean that's obviously nothing we can provide. What I can say is what I have said before, we have a good visibility of the second half, it's going to be extremely busy as you can see from the revenue guidance provided. And obviously, with the higher leverage that comes from volume, that will have a positive impact on the EBIT line. And that's what I can say about the second half of the year.

The first one is regarding EnVentus. I know you cannot give us any insight into negotiations with customers, but maybe you could help us a little bit about telling us the progression of EnVentus and how it has been received by the customers. I mean you've got one order for EnVentus here in the second quarter, but maybe a little bit more flavor on that, how that is progressing and how that's been received by the customers.

I think it's been truly generally well-received. I think they understand also what we are trying to achieve with the modular build on EnVentus. So I would say from that point it makes it easier also to address some of the local requirements from customers. So I think in that sense, it's an easy and it's a good discussion to have. So that's probably how it's perceived generally, Lars.

And then as a follow-up on that, which is regarding the local content requirement that you also mentioned earlier, you said that, that maybe will lead to higher CapEx. But on the cost side, I mean how is that going to affect your cost -- operating costs going forward, and hence, also, well, in the wider perspective, maybe also the margins?

Yes. In -- on a very sort of broad discussion, I mean the more external sourcing we do to cater for volume, obviously there's a price tag related to that. But then you also have the discussion with suppliers because they are, in general, very global even if they are localized. And then on top of it, you have obviously discussions with the customers. So ultimately, how it pans out depends on the different negotiations. But I think in a broader perspective, the more localized you get could have a certain price tag related to it. But again, that's the negotiation with both customers and suppliers. I think the most important thing in reality is that you have volume and -- or as a company, interesting enough, to actually find those that can support you in localization.

Yet another question regarding your slightly lower-margin guidance. Marika, could you give any kind of flavor to how much of this lower margin is due to costs actually coming up and other things -- and due to other things such as contingencies? I suppose normally you do a plan A and a plan B, now you have to do a plan C and a plan D also if tariffs increase somewhere in the world. I mean how much is this also a preparation for something that could change tomorrow and become even worse? And how much is actually sort of the real cost that you know will be higher? If you can give any kind of split on that.

And then secondly, a very broad question, I suppose. But with growth in the world sort of starting to see -- to slow down, are you seeing any kind of delays on projects, or accelerations for that matter? And to what degree does a lower interest rate also play into that very broad question?

Okay. So if we start with the overall cost, and I would say, what we are now telling you is what we know for -- at this point on the tariffs and the changes. And obviously, the 8% to 9% is a reflection of, I mean, pure higher costs for rerouting and transportation costs. So that is more a fact. When we talk about the plan C or D, that is the planning process that we are in the midst of for next year. And as I said, the more we can actually plan for, the better. And obviously that's part of the negotiations both with customers as well as suppliers. So there's a different opportunity to cover for those than when you are in the midst of execution. If that's understandable, Casper.

Okay, Casper. I'll take this sort of more broad -- on sort of the environment right now. I think there's 2 observations. I think generally we don't see projects being pulled or anything. I think we are benefiting here from that, that the industry has become much more mature. And that also means that the allocation of capital is not what I will call the short or the optimistic capital anymore. So I think there is a lot of infrastructure, 20, 30 years, money that goes into the industry. And those are not sort of going out of it even with a slightly more maybe grayer or bleak outlook for the world economy. So I think there is a lot to be had still from the change in energy sourcing generally from being the more fossils towards our part of the energy spectra in renewable. So I think that's the positive.

In terms of low interest rate. Come on, that just means that return on some of our projects still seems to be very attractive. So I can't see that right now doing anything else but just continuing to drive for our solutions around in areas. So in reality, on the short-term, no, we don't see anything. Clearly, if it becomes really more bleak and dark, then let's discuss that when we see that a few quarters ahead. But I think the other one is probably that, if it does, at least we will probably benefit a bit from lower raw materials if it came to that. But we haven't seen any of that yet. Thank you.

On turbine margins, these seem to be remaining stubbornly low across the industry. Could you help us understand a little bit better the improvement in the contribution margins that particularly new products at this more stable pricing can give you to help really see how turbine margin can recover from these low levels? That's my first question.

Yes. And Sean, that's what we have discussed a little bit before is, obviously, we don't develop any new products or concept without seeing a clear path to both lower levelized cost of energy as well as something in the pocket for us. So obviously, the -- I would say the pipeline of new products that we have should generate something also for Vestas. Otherwise, we wouldn't spend the money. And the more stable the price environment we have, the more positive, and that's what we're seeing right now.

We're not being that specific, Sean. But I mean you know the order backlog, you know what type of product we're taking in those orders. So I mean we have a positive view of the 2020 year, -- year 2020.

A question related to these strategic targets that you communicated in connection with the 2018 report. I can't remember the exact wording, but I guess the point was that you were expecting a minimum 10% margin after the introduction -- or after the normalization of the markets after the implementation of all the auctions. Could you just, yes, elaborate a little bit on this strategic target in -- yes, as of today?

Yes. I mean the strategic target of double-digit EBIT is obviously still there. And as I have said before, on a high level, as we are not guiding for next year, we have a very positive view on 2010 -- '20. We have new products and we have a very strong order intake. So obviously visibility also over 2020. Then there will always be some unknown factors apart from those that we know right now that could impact. But altogether, we have a positive view of 2020.

Okay. With that, that was the last question. We thank you again for both the attention and also your questions on this conference call. And again, look forward to speak and see you out there. Thank you.